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Signs of Changes Taking Hold in Electronics Factories in China – NYTimes.com


Signs of Changes Taking Hold in Electronics Factories in China

The iEconomy: Factory Upgrade: Change comes to factories in China.

 

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CHENGDU, China — One day last summer, Pu Xiaolan was halfway through a shift inspecting iPad cases when she received a beige wooden chair with white stripes and a high, sturdy back.

THE iECONOMY

A series examining challenges posed by increasingly globalized high-tech industries.

Multimedia
Gilles Sabrie for The New York Times

ON THE LINE Workers assembling Hewlett-Packard computers at a plant in Chongqing, China, operated by Foxconn of Taiwan. More Photos »

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At first, Ms. Pu wondered if someone had made a mistake. But when her bosses walked by, they just nodded curtly. So Ms. Pu gently sat down and leaned back. Her body relaxed.

The rumors were true.

When Ms. Pu was hired at this Foxconn plant a year earlier, she received a short, green plastic stool that left her unsupported back so sore that she could barely sleep at night. Eventually, she was promoted to a wooden chair, but the backrest was much too small to lean against. The managers of this 164,000-employee factory, she surmised, believed that comfort encouraged sloth.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

Other reforms were more personal. Protective foam sprouted on low stairwell ceilings inside factories. Automatic shut-off devices appeared on whirring machines. Ms. Pu got her chair. This autumn, she even heard that some workers had received cushioned seats.

The changes also extend to California, where Apple is based. Apple, the electronics industry’s behemoth, in the last year has tripled its corporate social responsibility staff, has re-evaluated how it works with manufacturers, has asked competitors to help curb excessive overtime in China and has reached out to advocacy groups it once rebuffed.

Executives at companies like Hewlett-Packard and Intel say those shifts have convinced many electronics companies that they must also overhaul how they interact with foreign plants and workers — often at a cost to their bottom lines, though, analysts say, probably not so much as to affect consumer prices. As Apple and Foxconn became fodder for “Saturday Night Live” and questions during presidential debates, device designers and manufacturers concluded the industry’s reputation was at risk.

“The days of easy globalization are done,” said an Apple executive who, like many people interviewed for this article, requested anonymity because of confidentiality agreements. “We know that we have to get into the muck now.”

Even with these reforms, chronic problems remain. Many laborers still work illegal overtime and some employees’ safety remains at risk, according to interviews and reports published by advocacy organizations.

But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics.

“This is on the front burner for everyone now,” said Gary Niekerk, a director of corporate social responsibility at Intel, which manufactures semiconductors in China. No one inside Intel “wants to end up in a factory that treats people badly, that ends up on the front page.”

The durability of many transformations, however, depends on where Apple, Foxconn and overseas workers go from here. Interviews with more than 70 Foxconn employees in multiple cities indicate a shift among the people on iPad and iPhone assembly lines. The once-anonymous millions assembling the world’s devices are drawing lessons from the changes occurring around them.

As summer turned to autumn and then winter, Ms. Pu began to sign up for Foxconn’s newly offered courses in knitting and sketching. At 25 and unmarried, she already felt old. But she decided that she should view her high-backed chair as a sign. China’s migrant workers are, in a sense, the nation’s boldest risk-takers, transforming entire industries by leaving their villages for far-off factories to power a manufacturing engine that spans the globe.

Ms. Pu had always felt brave, and as this year progressed and conditions inside her factory improved, she became convinced that a better life was within reach. Her parents had told her that she was free to choose any husband, as long as he was from Sichuan. Then she found someone who seemed ideal, except that he came from another province.

Reclining in her new seat, she decided to ignore her family’s demands, she said. The couple are seeing each other.

“There was a change this year,” she said. “I’m realizing my value.”

An Inspector’s Push

“This is a disgrace!” shouted Terry Gou, founder and chairman of Foxconn, the world’s largest electronics manufacturer and Apple’s most important industrial partner.

It was March of this year and Mr. Gou — seen by activists as a longtime obstacle to improving conditions inside his factories — was meeting with his top deputies in Shenzhen, China. In 2011, The New York Times began sending Apple and Foxconn extensive questions about working conditions in factories manufacturing Apple products.The resulting articles in late January detailed problems ranging from excessive overtime and under-age workers to sometimes deadly hazards, such as workers’ using a poisonous chemical to clean iPhone screens at another manufacturer, and an explosion in Ms. Pu’s Foxconn plant that killed four workers.

In January, Apple publicly released the names of many of its suppliers for the first time. Additionally, the company made the unusual move of joining the Fair Labor Association, one of the largest workplace monitoring groups. Auditors from that association were soon inspecting Apple’s partners in China, starting with Foxconn.

Now, Mr. Gou was learning the results of those examinations. Foxconn was still failing to stop illegal overtime, the association’s lead inspector told Mr. Gou and his lieutenants, according to multiple people with knowledge of the meeting. The company was failing to keep student interns off night shifts. Foxconn had not put sufficient safety policies into practice and had exposed potentially hundreds of thousands of workers to at least 43 violations of Chinese laws and regulations.

“The world is watching!” Mr. Gou yelled, according to multiple people. “We are going to fix this, right here!”

But the inspector was not done.

He turned to the only Apple executive in the room, the senior vice president for operations, Jeff Williams. Apple needed to change as well, the inspector said. Apple, to its credit, had been working for years to improve conditions in overseas factories, but the company was treating such problems too much like engineering puzzles, the inspector said.

“Long-term solutions require a messier, more human approach,” that inspector, Auret van Heerden of the Fair Labor Association, told Mr. Williams. Instead of concentrating on writing more policies, Apple needed to listen better to workers’ complaints and advocacy groups’ recommendations.

Some of those suggestions surprised Mr. Williams, say people who worked with him. Since 2007, Apple had built one of the most extensive auditing programs in the electronics industry, inspecting over 800 facilities. It was a point of pride for both Mr. Williams and the company’s top leadership.

When Mr. Williams, who declined to comment for this article, returned from that March meeting to California, changes began. Among them, say people with firsthand knowledge, was the hiring of roughly 30 professionals into Apple’s social responsibility unit in the last year, which tripled the size of that division and brought high-profile corporate activists into the company. Two widely respected former Apple executives — Jacky Haynes and Bob Bainbridge — were recruited back to help lead the unit, reporting ultimately to Mr. Williams and the chief executive, Timothy D. Cook.

“Everyone knows Bob and Jacky,” said a former Apple executive. “It sends a message that Jeff and Tim expect everyone to get on board.”

Moreover, the company has reached out to advocates it once rebuffed. In late April, Apple allowed the first in a series of pollution audits by Ma Jun, a Chinese environmental advocate who works closely with dozens of other multinationals but whom Apple had refused to speak with until last year, according to Mr. Ma. In September, the company joined the Sustainable Trade Initiative, an advocacy group based in the Netherlands.

“They know now if they don’t participate, it is the same as saying nothing,” Mr. Ma said.

Foxconn has also shifted. After the meeting with the Fair Labor Association, Foxconn announced that by July 2013, no employee would be allowed to work more than an average of 49 hours a week — the limit set by Chinese law. Previously, some Foxconn employees worked schedules that approached 100 hours a week. No other major manufacturer has pledged to abide by China’s work-hour laws in such a public manner. Foxconn, which is based in Taiwan, also promised to increase wages, so employees’ total pay would not decline despite fewer hours — the equivalent of a 50 percent raise for many workers, analysts say.

With 1.4 million employees in China — the most of any private company — Foxconn is setting a bar that all manufacturers will be judged against, say executives at other companies.

“When the largest company raises wages and cuts hours, it forces every other factory to do the same thing whether they want to or not,” said Tony Prophet, a senior vice president at Hewlett-Packard. “A firestorm has started, and these companies are in the glare now. They have to improve to compete. It’s a huge change from just 18 months ago.”

Foxconn, in a statement, said that it was “committed to ensuring that we provide a safe and healthy working environment for all our employees,” and that the company had regularly increased wages over the last three years.

Secrecy and Transparency

Despite those reforms, however, worker advocates inside Apple and with outside groups say the electronics industry’s problems will not genuinely diminish until Apple — the world’s most valuable company — starts filling a public leadership role similar to that of companies in other industries with overseas problems, like Nike in footwear manufacturing and Patagonia in apparel.

Such public leadership and transparency can run counter to a culture of secrecy that pervades Apple. Employees often don’t know what their lunch companions or next-door office mates are working on. This secrecy has helped Apple stay ahead of competitors, but has been a problem when it spills into the broader corporate culture, say past executives.

“It’s remarkable how the paranoia in Silicon Valley prevents companies from cooperating, even on something like corporate social responsibility,” said Mr. van Heerden of the Fair Labor Association, who added that his work with Apple, Foxconn and other companies was confidential.

While Apple is the only electronics company to join Mr. van Heerden’s monitoring group, it has not opened up in some other ways. Apple has declined to release audit reports on the hundreds of facilities the company has inspected. After two factory explosions last year, Apple did not share investigative reports with other companies so they might avoid similar accidents. Apple does not, in general, publicly identify terminated suppliers or factories that have violated Apple’s supplier code of conduct.

Moreover, Apple’s growing team of safety and corporate responsibility experts are typically prohibited from sharing their findings at conferences, in academic journals or other forums where their insights could be absorbed by other companies, according to former members of that team.

“Apple is scared that if we open the kimono too wide, it will ruin what has made Apple special,” said one former company official. “But that’s the only way to really improve things. If you don’t share what you know, then no one else gets a chance to learn from your mistakes and discoveries.”

Apple declined requests for interviews. In a statement, it said the company embraced its “unique position to lead” and had taken working conditions very seriously for a long time. “No one in our industry is doing as much as we are, in as many places, touching as many people as we do. Through years of hard work and steadfast commitment, we have set workplace, dormitory and safety standards, sought help from the world’s leading experts, and established groundbreaking educational programs for workers.”

“We have been upfront about the challenges we face and are attacking issues aggressively,” the statement continues. “We believe deeply in transparency and have demonstrated this through reporting our shortcomings and exposing violations.”

At a conference in May, Mr. Cook, the chief executive, said that the company was “going to double down on secrecy on products.”

He added, however, that “there’s going to be other things that we do that we’re going to be the most transparent company in the world on. Like social change. Supplier responsibility. On what we’re doing for the environment. We’re going to be the most transparent, because we think that transparency is so important in these areas, and that if we are, other people will copy what we’re doing.”

This year, Apple began publishing monthly summaries of suppliers’ compliance with overtime standards. In October, Apple hosted other technology companies for a private discussion on responses to excessive work hours overseas. While Apple’s annual supplier responsibility reports do not contain details on specific factories, they are still among the most thorough in the electronics business.

But Apple has not sought the high-profile leadership opportunities that have set off transformations in other industries. Nike, for instance, has convened public meetings of labor, human rights, environmental and business leaders to discuss how to improve overseas factories. The clothing retailer Gap Inc. has invited outside organizations to critique its purchasing practices and publish their findings. Patagonia shares its factory audits with competitors and has been a vocal supporter of a centralized audit report clearinghouse that lets companies share information.

“That’s the standard Apple has to meet,” said a former Apple executive. “That’s how a leader transforms an industry.”

A More Human Touch

Almost 200 miles southeast of the factory where Ms. Pu received her new chair is another plant that is experimenting with improving workers’ quality of life — and shows the trade-offs of such gains.

The factory, in Chongqing, makes computers for Hewlett-Packard, a company with little of Apple’s glamour. It is operated by Quanta, a little-known Taiwanese manufacturer.

Inside the plant, amid thousands of workers in bright white uniforms, are occasional flashes of pink worn by people like Zhang Xuemei, a bubbly 19-year-old with glinting earrings whose sole job is to chat with co-workers.

For eight hours a day, Ms. Zhang collects complaints about the factory’s free meals and dorms. She listens to workers who are divorcing, homesick or arguing with managers. When she finds someone suffering, she refers them to the company’s full-time doctor or professional counselors.

Quanta’s 10-story dormitories feel like a college campus. There is a free movie theater, television rooms, a large martial arts gym, two spacious karaoke bars, a huge cafeteria and an aerobics hall playing a Chinese remix of “Gangnam Style.”

Neither Quanta nor Hewlett-Packard claims it has solved every labor woe. And the amenities are partly selfish: one of the biggest problems for Chinese factories is that workers are constantly leaving. Hewlett-Packard hopes that by improving living conditions, turnover and training costs will fall.

“You can tweak the line and get one second out of the process, but if the people turn over every three months, think what that does to your quality,” said Mr. Prophet, the Hewlett-Packard executive.

Last year, a worker advocacy group criticized another Quanta plant, in Shanghai, for harsh working conditions found at many factories, including extensive overtime and poor food. In Chongqing, Hewlett-Packard has agreed to pay slightly higher prices initially so that Quanta can offer workers a better quality of life. Such payments are the price all companies should bear for more humane factories, say Hewlett-Packard executives.

There are costs for workers, too. Quanta’s employees earn slightly less than their peers at Foxconn. What’s more, Quanta’s emphasis on hours that are easier on employees means they are prohibited from overtime shifts that advocates say are abusive, but which some workers insist they want.

Zhang Jiang, a slim 21-year-old, previously assembled laptop computers at another company in Shanghai. Each week, he sent the bulk of his pay home so his younger brother could stay in school. Overtime was like a blessing, he said.

But last summer, fed up with the 25-hour train trip to see his family, Mr. Zhang moved to Chongqing and joined Quanta. He enjoys the better facilities and dorms. He frequently visits his parents’ home. But his take-home pay has fallen by nearly a third and the thought that his brother may have to drop out of school so he can help the family gnaws at Mr. Zhang. Instead of working in the factory each night, he spends hours playing an online game, Dungeon Fighter.

“I’d like to work 80 hours a week,” he said.

Change Is Hard

Hewlett-Packard also makes products at Foxconn factories, as does almost every major electronics firm. Foxconn, more than any other company, has proved that Chinese plants can deliver obsessive attention to quality. The company has helped make China into a manufacturing juggernaut through strict discipline that is visible everywhere, even in the salutes managers give visiting executives.

That discipline, say former Apple executives, is one reason every iPhone is put together so well.

It is also one reason the reforms enjoyed by employees like Ms. Pu — who received the new chair — have not spread quickly. Though Foxconn has trained managers to treat employees more gently, foremen still use profanity and intimidation, workers say.

“The managers speak in a manner that often feels like a threat,” said Mou Kezhang, who works in iPad quality assurance at the Foxconn factory in Chengdu.

Foxconn, in a statement, said it had “always been among the fastest to adopt change and reform.” Its policy, the company said, is “to treat employees with respect and if we find any transgressions, they are immediately investigated and addressed.”

In the last two years, Hewlett-Packard has increasingly moved its manufacturing to Quanta. Foxconn has not fought particularly hard to win that business back, according to Hewlett-Packard officials. Often, the quality-of-life improvements requested by Western electronics executives come at the cost of a supplier’s bottom line. Even within Apple, tensions erupt because executives often believe improvements should be financed by suppliers, whereas suppliers say changes are not feasible unless Apple pays more.

And ultimately, some workers themselves resist reforms. In March, when Foxconn announced that workers’ hours would be reduced to China’s legal limits, employees began complaining. “Absolutely I’d like to do overtime to work more than 60 hours, but now there’s a ceiling on it,” said Ma Changqiao, a 23-year-old at Foxconn’s Chongqing factory.

Change is hard, say officials at multiple companies. Reforming labor conditions in a country as large as China will probably take decades, and labor abuses are an ever-evolving problem without just one right answer.

In September, six months after Foxconn agreed to a Fair Labor Association request for new internship rules, two worker advocacy groups found that students in nonmanufacturing courses were being improperly forced to work at a Foxconn plant in north central China. One student studying preschool education said she was prohibited from quitting her internship and was compelled to work night shifts. Afterward, Mr. Gou of Foxconn issued apologies to wronged interns and the responsible official was fired.

Today, Foxconn’s internship program continues — a testament, executives say, to Foxconn’s commitment to a program that can benefit thousands of students, even when making improvements is hard and stumbles are inevitable. Changing the company’s culture is slow going. But the needed reforms, executives at Apple and Foxconn hope and believe, are falling into place.

Signs of Changes Taking Hold in Electronics Factories in China – NYTimes.com.

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How Hurricane Sandy forced NYC to reconnect with pay phones | Firstpost


How Hurricane Sandy forced NYC to reconnect with pay phones

Nov 4, 2012

 

With cell phone service knocked out and no electricity in many parts of New York City in the wake of superstorm Sandy, people are waiting in lines to use a relic from the past – the pay phone.

“I didn’t even know they were working,” New York City resident Leslie Koch said about the public pay phones in an interview with the Wall Street Journal.

Earlier this week Koch celebrated her blast with the past when she used the antiquated device by taking a picture of it and posting it to her Twitter account with a caption that said, “This is called a pay phone. Used one today to call my mom from #NYC.”

Koch is one of many New Yorkers who had been walking past pay phones on a daily basis and didn’t pay them any attention.

Reuters

“It’s funny what’s hiding in plain sight,” Jordan Spak, a 32-year-old television marketer told theJournal. “It’s invisible, but when you need it, it’s there.”

In the storm’s aftermath, throngs of residents are using the old-fashioned contraptions as a last resort to connect to family and friends, because millions of people lost power during the storm rendering their cellphones, iPads, computers and other state-of-the-art technology useless.

Alison Caporimo, 24, who lives in Manhattan, told the Journal she didn’t even know how to operate a public pay phone before Tuesday admitting, “I lost a lot of coins” while trying to figure out how to use the outdated machine.

Although many New Yorkers are dependent on modern gadgetry, during times of distress, such as after the 11 September terrorist attacks, the city has become reliant on pay phones that usually stay in service even during flooding. In fact, one of the most daunting challenges with using the devices during an emergency is keeping them free of coin overloads, the Journal reported.

“During disasters, we sometimes have to empty them every day,” Thomas Keane, chief executive officer of Pacific Telemanagement Services, said. “It takes 300 to 400 calls a day for that to happen.”

The dependency on the retro technology this week comes just months after New York announced a pilot programme to convert several pay phones around the city into free Wi-Fi hotspots.

There are about 12,000 public pay phones in New York City, 27,000 fewer than 20 years ago, according to the Department of Information Technology and Telecommunications, which regulates the city’s pay phones.

 How Hurricane Sandy forced NYC to reconnect with pay phones | Firstpost.

 

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Anger Flares as Recovery Inches Ahead – NYTimes.com


Anger Flares as Recovery Inches Ahead

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People waited for food to be distributed in Long Beach, N.Y.

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By KATE ZERNIKE and CHRISTINE HAUSER
Published: November 2, 2012

Patience wore thin over gas shortages, power failures and long lines for everything from buses to food handouts on Friday, as many parts of the New York City region struggled to recover from the devastation left by Hurricane Sandy.

Live Updates

But even as people cleaned up the debris from wrecked homes, there were still painful reminders of the toll in lives lost that the storm took.

On Staten Island, the borough that bore the brunt of the city’s casualties, rescuers pulled two bodies from a house in the hard-hit Midland Beach neighborhood on Friday afternoon. Neighbors who had been carrying ruined furniture and trash to the street watched as two body bags were carried out of a house on Olympia Boulevard, about two miles from the Verrazano-Narrows Bridge.

The two victims, who were not immediately identified, brought to five the number of bodies found in Midland Beach, a low-lying area of bungalows and newer two-story houses that was hit hard by the surge that accompanied the storm.

The borough has become the epicenter of the devastation wrought in New York by the hurricane, which swept through the area after making landfall on Monday, as most of the more than 40 fatalities have occurred there.

As more than one million New Yorkers continued to cope with power failures, even the planned New York City Marathon became a source of bitter derision when news emerged that generators being used by organizers could have served hundreds of residences on Staten Island. City officials and the event’s organizers decided Friday afternoon that the race would not be held Sunday, according to a person familiar with the decision.

Government officials continued to emphasize their round-the-clock efforts, many by volunteers or employees whose own homes had been damaged, to restore normal life.

But people were becoming exasperated. At a housing project in Coney Island, residents who stayed behind expressed mounting frustration at the absence of electricity, services and, in some cases, security. Some said they were so frightened that they locked themselves in their apartments at night and refused to open the doors to anyone.

“It’s terrible,” said Marilyn Smalls, 48, who lives at the housing project in Coney Island. “Totally black. It’s dangerous.”

Government officials have asked for patience. City departments tried to stave off the anger by opening help lines, handing out free meals, updating citizens with progress in restoring services and monitoring Twitter feeds, where they answered residents directly about their individual commutes. Fees were waived for bus and subway travel.

Amid the continuing grief and hardship, Mayor Michael R. Bloomberg announced on Friday that the death toll in the city had risen to at least 41.

But there were some positive signs: parts of Lower Manhattan might have power by the end of Friday, New Jersey Transit started running partial rail service, more of the Metro-North Railroad system was back and the Staten Island Ferry started up again.

Mr. Bloomberg also said that a rule that required cars traveling into Manhattan on all tunnels and bridges, except the George Washington Bridge, to have at least three people would be lifted at 5 p.m. on Friday.

Consolidated Edison, he said, hoped to have power restored to “most” of Manhattan by midnight Friday, although residents who live in boroughs served by overhead lines will have to wait “a lot longer” for power to return. The East Village had its power restored Saturday afternoon.

But perhaps mindful of the realities of disaster recovery, Gov. Andrew M. Cuomo’s briefing was filled with encouraging updates along with expressions of caution. He said the city had made “great progress,” with service restored to about half of the two million customers who lost electricity during the storm.

Noting that progress in restoring power to Manhattan’s downtown area in particular would be a “big step forward” for transportation serving the area, he also hedged his remarks, noting it “did not mean that every light” would work.

Speaking about the shortages, including of gas, he said: “It is going to require some patience, it is not going to get better overnight, it is not going to be a one- or two- or three-day situation. A little patience, a little compassion, a little understanding will make it better for everyone.”

“It has been a long week for everyone,” Mr. Cuomo added. “It is not over. There are still inconveniences but it could have been a lot, lot worse.”

The financial losses, too, continue to pile up, approaching $50 billion, according to an early estimate from economists at Moody’s Analytics — about $30 billion in property damage, the rest in lost economic activity such as meals and canceled flights.

Live Updates

But increments of progress, including a second day of limited subway and bus lines, have been made in the aftermath of the hurricane, which made landfall on Monday night as what officials now describe as the worst storm to hit New York. Its punishing floods, rains and wind left millions of people with overwhelming problems they too had likely never faced.

Gina Braddish, 27, had four feet of water flood her home in Long Beach, on Long Island, leaving a slick of oil, gasoline and raw sewage across her floors.

“I have oil slicked on my floors, and they tell me it’s not an emergency,” she said. “When the house blows up, then it’s an emergency. I just want someone to come down here and help.”

As the week drew to a close, the widespread shortages disrupted some rescue and emergency services. The effort to secure enough gas for the region moved to the forefront of recovery work.

Mr. Cuomo said that as ports were reopened, the gas shortages should start to ease.

But local officials sprang into action in the meantime. The town of Belleville, in Northern New Jersey, passed an ordinance rationing gas Thursday night that was reminiscent of the 1970s oil embargo. Starting Monday, and until the governor lifts the state of emergency, people whose license plates end in odd numbers can buy gas only on odd numbered dates, and those with even numbers on even numbered dates. The mayor of nearby Montclair suggested to the town council that it consider a similar plan.

In New Jersey, drivers had been waiting in lines that ran hundreds of vehicles deep, requiring state troopers and local police officers to protect against exploding tempers. Some ran out of gas waiting.

At stations that were open, nerves frayed. Fights broke out Thursday at the block-long Hess station on 10th Avenue in Midtown Manhattan, forcing the Police Department to send three officers to keep the peace, a police official said. By evening, the police had to close two lanes of the broad thoroughfare to accommodate a line of customers stretching eight blocks, to 37th Street.

Abhishek Soni, the owner of an Exxon in Montclair, N.J., called the police and turned off pumps for 45 minutes to cool nerves when disputes in the line Wednesday night became heated. “My nose, my mouth is bleeding from the fumes,” he said. “The fighting just makes it worse.”

On Friday, the Queens district attorney’s office said a St. Albans man had been arrested after he pointed a pistol at a motorist who complained when he tried to cut a line at a Queens gas station. The man, Sean M. Bailey, 35, was charged with second-degree criminal possession of a weapon and second-degree menacing.

Some have questioned whether the volunteers for the annual marathon, scheduled for Sunday, could be better deployed to assist with disaster relief. The New York Post coverquestioned its use of generators. Mr. Bloomberg said the race should go on, defending the response of his predecessor, Rudolph W. Giuliani, in the months after the Sept. 11, 2001, terror attacks. He said donations from runners would help.

Earlier, when Mr. Cuomo was asked, he said that it was a decision better left to local officials, but that he understood “both sides.”

Commuters have had to adapt to new rules to get to work with ingenuity and patience. On Friday in New York City, subway trains, which pressed back onto the rails on Thursday, continued with limited service, with downtown trains in Manhattan going as far as 34th Street before stopping because of power problems there.

Leslie Watson, 43, a supervisor for AM New York, said that he took the M train over the F line but that he would normally take the E.

“Yesterday, there were a couple of people from M.T.A. giving out information, but otherwise, like today, you’re on your own,” Mr. Watson said. “Not bad, but not good. My commute was 12 minutes late.” Traveling between Staten Island and Manhattan became a little easier on Friday with the resumption of ferry service.

By midmorning on Friday, long lines grew for the Williamsburg ferry service and they snaked around the Barclays Center in Brooklyn, where people boarded shuttle buses to Manhattan to connect with other stops in the transit system. Many adapted, eating breakfast where they stood.

“I am rereading ‘Game of Thrones,’ ” Colin Wiggins, 30, who works in student affairs for CUNY in the northwest Bronx, said as she waited. “I chose this book because I knew I wanted something long and interesting for the next days.”

For Friday’s commute, East River crossings by private passenger car were reportedly slightly more fluid as drivers apparently realized the authorities meant business when they required cars to carry three passengers or more in order to cross into Manhattan. When those rules went into effect on Thursday, cars were turned back if they failed to gather up the required passenger loads, creating the unintended effect of more traffic jams.

 Anger Flares as Recovery Inches Ahead – NYTimes.com.

 

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Opinion: In age of social media, national political conventions still have vital role – The Hill – covering Congress, Politics, Political Campaigns and Capitol Hill | TheHill.com


 

The Hill Newspaper

 

Opinion: In age of social media, national political conventions still have vital role

By Judd Gregg - 08/27/12 05:00 AM ET

  

In a time of social media, iPads, FaceTime and constant communication, it is often difficult to understand the purpose and need for national political conventions. 

The question that is increasingly being asked — and which is becoming more relevant — is why we need to have these quadrennial gatherings at all. 

No convention in 70 years has played a significant role in picking the nominee of the party. 

The platforms developed as statements of party policy at these events are often ignored — and the nominee of the party in some cases campaigns against them.  The folks who attend the conventions used to take comfort in the assurance, at least, of enjoying a continuous good time. 

But the actual convention partying has been scaled back considerably, as events were most often underwritten by those unsavory “special interests.” 

Thus the event’s fun has taken a significant hit in the last decade or so. 

This all creates the feeling conventions are anachronisms — developed in an era when people needed to physically gather to set the course of their parties and the nation — that hold only a marginal purpose in today’s digital times.

But are they really outdated and unnecessary?

If you look at what is developing in our political system today, one of the most significant events is the rise of the independent voters — currently the nation’s largest identified voting bloc. 

Certainly, in almost every swing state — places critical to determining the outcome of the Electoral College and the presidential race — it is the independent voter who decides the winner. 

This creates an atmosphere where party affiliation seems less and less important. 

We hear constantly about how candidates, after they have obtained the nomination of their party, try to move “back to the center” so that they can win over the “critical” independent vote in the fall. 

In light of this, one might be tempted to conclude the national conventions actually hurt the chosen candidates. 

Conventions are, after all, naturally populated by “base” voters and activists, and end up highlighting positions that are most often not going to assist in attracting independent voters.

All this being said, there is a more important and significant role that conventions play that makes them not only relevant in today’s political world, but critical to the maintenance of our form of constitutional government. 

The convention system and, more importantly, the primary process that leads up to the conventions give the parties a chance to reinvigorate themselves every four years. 

Even though the outcomes are a foregone conclusion long before the conventions occur, they mark a clear decision point and chance for the identities of the two parties to be confirmed. 

They also give the nominee his or her best opportunity to speak to the American people about his or her plans, in a way that is not filtered by the press. 

If we look around at other democracies, especially Western nations, there are two essential differences with our approach. 

First, most of them are parliamentary governments — so they do not have our system of checks and balances. 

Second, they have multiple parties and thus the various interest and issue groups are diffused. 

This second point is a critical difference. 

The effect of multiple parties, even in a parliamentary form of government, is to make it extremely challenging to reach consensus on action, because the power becomes so splintered. 

Our system, which has been a two-party system for most of our nation’s modern history, has given us the unique advantage of having two central organizations that bring people together under the broad umbrellas of either Democrats or Republicans. 

This leads to a system that is able to better focus issues and push toward consensus and thus action. 

It may not look like it works that well, but compared to multi-party democracies, the two-party system gives us a huge advantage. This two-party system is confronting many centrifugal forces in today’s world. 

It is facing great pressure both from the independent vote and the rise of digital information, which naturally undermines the need for parties.

Without the forum of the political convention, the two-party system would be under even greater stress. 

The rise of a fragmented system would gain greater momentum. 

Those who believe that being unaffiliated with a party leads to better governance would find out rather quickly, with the further deterioration of the two-party system, that multi-party rule leads to a less effective and more strident form of government. 

The physical event of the conventions might seem irrelevant to most Americans in our cyberworld, but the reassertion of the two-party system that they represent is critical to maintain a government that delivers a uniquely American democracy.

 Opinion: In age of social media, national political conventions still have vital role – The Hill – covering Congress, Politics, Political Campaigns and Capitol Hill | TheHill.com.

 

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Apple’s market cap makes it the most valuable company of all time – Aug. 20, 2012


 

Apple is now the most valuable company of all time

 

By David Goldman @CNNMoneyTech August 20, 2012: 12:16 PM ET

 

NEW YORK (CNNMoney) — As Apple’s stock rose to new high on Monday, the technology giant set another record: It became the most valuable public company in history.

Apple’s market value — the price of its stock multiplied by the number of outstanding shares — hit $623 billion in intraday trading. That eclipsed the previous record of $618.9 billion set by Microsoft on Dec. 30, 1999, at the height of the dot-com bubble, according to Howard Silverblatt, S&P’s senior index analyst.

Apple shares hit a new record of $664.74 per share. The anticipated September launch of the new iPhone, coupled with rumors of a smaller iPad and a more feature-rich Apple TV have lifted the stock in recent weeks.

It’s a stunning achievement for a company that was a struggling also-ran when Microsoft was setting records in the late 1990s. Apple was valued at less than $10 billion as recently as 2004, and at $100 billion just three years ago.

Since 2007, however, Apple (AAPL, Fortune 500) has been an unstoppable force. Its iPhone business alone now brings in more money than Microsoft (MSFT, Fortune 500). Even the iPad, which was intended to be a gap-filling product between the iPhone and the Macintosh, has itself become a multi-billion dollar product for Apple.

Apple is on pace to be the world’s largest technology company in terms of sales by the end of the year, and it’s among the most profitable companies in the world. In the last three months of 2011, Apple made $13 billion – second only to ExxonMobil’s (XOM, Fortune 500) record-setting $14.8 billion quarter from the fall of 2008, when oil prices were at an all-time high.

The company’s lightning-quick growth shows no signs of subsiding. With rumors of new gadgets on the horizon, Apple has crossed the $400 billion,$500 billion and $600 billion marks — all in 2012 — as the stock has soared 64% this year.

Despite the fast growth, some say that the company is actually undervalued, since its stock gains haven’t kept pace with its earnings. Trading at 15 times this year’s earnings forecast, it has a price-to-earnings ratio far below that of some tech stocks, including Facebook (FB),Groupon (GRPN) and even Zynga (ZNGA), whose stock has plunged sharply.

Apple still has one last hurdle to climb: Microsoft still holds the record for most valuable company on the stock market if inflation is taken into account. In 2012 dollars, Microsoft’s all-time-high would have amounted to $851 billion.

Apple has quite a way to go before it hits that mark. Its stock would have to reach $908 per share.

 Apple’s market cap makes it the most valuable company of all time – Aug. 20, 2012.

 

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Beware, Tech Abandoners. People Without Facebook Accounts Are ‘Suspicious.’ – Forbes


 

Beware, Tech Abandoners. People Without Facebook Accounts Are ‘Suspicious.’

The term “Crackberry” seems silly today — and not just because consumers OD’ed on Blackberry and moved on to iDealers. The term arose in an earlier “aughts” time when Blackberry dominated the smartphone market and lawyers and execs were nearly the only ones who had them, due to their need to be able to respond to email immediately. Things have changed. Now we all need to be able to respond to email immediately. And to tweet. And to instantly share our photos onFacebook. We’re all addicted to technology now, and not just to the Blackberry. We’re “addicted” to our iPhones, and Facebook, and Twitter, and Android, and Pinterest, and iPads, and Word with Friends, and fill-in-the-blank-with-your-digital-dope-of-choice.

The sudden and dramatic advent of social-media-enabling technologies into our lives seems to be causing some mid-digital-life crises. Not only has Silicon Valley developed a guilty conscience about addicting us to screens, we the users are starting to question how technology is changing us: making us fat, making us unhealthy, making us depressed, making us lonely, making us narcissistic, and making us waste time worrying about whether it’s making us fat, unhealthy, depressed, narcissistic and/or lonely. That’s leading some users to consider abandoning the whole enterprise. My colleague Haydn Shaughnessy gave up his smartphone last year. Now, inspired by the example of former Facebooker Katherine Losse, he’s considering giving up Facebook.

I am writing with some words of caution. I used to say that “if you’re not on Facebook, it’s possible you don’t actually exist.” I think it’s time to update that, courtesy of Slashdot: Facebook abstainers will be labeled suspicious.

Slashdot flagged a German news story in which an expert noted that mass murderers Anders Breivik and James Holmes both lacked much of a social media presence, leading to the conclusion, in Slashdot’s phrasing, that “not having a Facebook account could be the first sign that you are a mass murderer.”

That’s a tad extreme, but I’m seeing the suggestion more and more often that a missing Facebook account raises red flags. After a woman found out via Facebook that a man who’d ‘poked’ her in real life had a long term girlfriend, she turned to digital manners advice givers Farhad Manjoo and Emily Yoffe of Slate to ask whether she should tell the girlfriend. They said she should and then went on a digression about transparent romances in the age of Facebook:

Farhad: I think we’ve mentioned it before that if you are going out with someone and they don’t have a Facebook profile, you should be suspicious.

Emily: Wait a minute. You may have mentioned that.

Farhad: I think I’ve recommended that. You know why, though? Imagine if this guy didn’t have a Facebook profile. That’s why. You should be suspicious of someone who is not making your relationship known publicly on a site like Facebook. I’m going to go on record with that.

Emily: I’m fine with people not having a Facebook page if they don’t want one. However, I think you’re right. If you’re of a certain age and you meet someone who you are about to go to bed with, and that person doesn’t have a Facebook page, you may be getting a false name. It could be some kind of red flag.

via Transcript: Facebook stalker: Should I tell a cheating guy’s girlfriend that we hooked up? – Slate Magazine.

It’s not just love seekers who worry about what the lack of a Facebook account means. Anecdotally, I’ve heard both job seekers and employers wonder aloud about what it means if a job candidate doesn’t have a Facebook account. Does it mean they deactivated it because it was full of red flags? Are they hiding something?

The idea that a Facebook resister is a potential mass murderer, flaky employee, and/or person who struggles with fidelity is obviously flawed. There are people who choose not to be Facebookers for myriad non-psychopathic reasons: because they find it too addictive, or because they hold their privacy dear, or because they don’t actually want to know what their old high school buddies are up to. My own boyfriend isn’t on Facebook and I don’t hold it against him (too much).

But it does seem that increasingly, it’s expected that everyone is on Facebook in some capacity, and that a negative assumption is starting to arise about those who reject the Big Blue Giant’s siren call. Continuing to navigate life without having this digital form of identification may be like trying to get into a bar without a driver’s license.

Case in point: Katherine Losse, the ex-Facebook employee that quit the company and the social network after cashing in her stock options, and who inspired my colleague to consider UnFacebooking, couldn’t stay off Facebook for long. She wound up opening a new account.

“You can’t get away from it. It’s everything. It’s everywhere,” she told the Washington Post. “The moment we’re in now is about trying to deal with all this technology rather than rejecting it, because obviously we can’t reject it entirely.”

Well, you can, but it might lead to your being rejected down the line too.

 Beware, Tech Abandoners. People Without Facebook Accounts Are ‘Suspicious.’ – Forbes.

 

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Your E-Book Is Reading You – WSJ.com


Your E-Book Is Reading You

Digital-book publishers and retailers now know more about their readers than ever before. How that’s changing the experience of reading.

By ALEXANDRA ALTER

It takes the average reader just seven hours to read the final book in Suzanne Collins’s “Hunger Games” trilogy on the Kobo e-reader—about 57 pages an hour. Nearly 18,000 Kindle readers have highlighted the same line from the second book in the series: “Because sometimes things happen to people and they’re not equipped to deal with them.” And on Barnes & Noble’s Nook, the first thing that most readers do upon finishing the first “Hunger Games” book is to download the next one.

For centuries, reading has largely been a solitary and private act, an intimate exchange between the reader and the words on the page. But the rise of digital books has prompted a profound shift in the way we read, transforming the activity into something measurable and quasi-public. Eben Shapiro explains on Lunch Break. Photo: AP.

 

In the past, publishers and authors had no way of knowing what happens when a reader sits down with a book. Does the reader quit after three pages, or finish it in a single sitting? Do most readers skip over the introduction, or read it closely, underlining passages and scrawling notes in the margins? Now, e-books are providing a glimpse into the story behind the sales figures, revealing not only how many people buy particular books, but how intensely they read them.

We Know What You Read

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Illustration by John Cuneo

The perfect man, according to data collected by digital publisher Coliloquy from romance-novel readers, has a European accent and is in his 30s with black hair and green eyes.

For centuries, reading has largely been a solitary and private act, an intimate exchange between the reader and the words on the page. But the rise of digital books has prompted a profound shift in the way we read, transforming the activity into something measurable and quasi-public.

The major new players in e-book publishing—Amazon, Apple and Google—can easily track how far readers are getting in books, how long they spend reading them and which search terms they use to find books. Book apps for tablets like the iPad, Kindle Fire and Nook record how many times readers open the app and how much time they spend reading. Retailers and some publishers are beginning to sift through the data, gaining unprecedented insight into how people engage with books.

Publishing has lagged far behind the rest of the entertainment industry when it comes to measuring consumers’ tastes and habits. TV producers relentlessly test new shows through focus groups; movie studios run films through a battery of tests and retool them based on viewers’ reactions. But in publishing, reader satisfaction has largely been gauged by sales data and reviews—metrics that offer a postmortem measure of success but can’t shape or predict a hit. That’s beginning to change as publishers and booksellers start to embrace big data, and more tech companies turn their sights on publishing.

Barnes & Noble, which accounts for 25% to 30% of the e-book market through its Nook e-reader, has recently started studying customers’ digital reading behavior. Data collected from Nooks reveals, for example, how far readers get in particular books, how quickly they read and how readers of particular genres engage with books. Jim Hilt, the company’s vice president of e-books, says the company is starting to share their insights with publishers to help them create books that better hold people’s attention.

The stakes are high for the company as it seeks a greater share of the e-book market. Sales of Nook devices rose 45% this past fiscal year, and e-book sales for the Nook rose 119%. Overall, Nook devices and e-books generated $1.3 billion, compared to $880 million the previous year. Microsoft recently invested $300 million for a 17.6% stake of the Nook.

Mr. Hilt says that the company is still in “the earliest stages of deep analytics” and is sifting through “more data than we can use.” But the data—which focuses on groups of readers, not individuals—has already yielded some useful insights into how people read particular genres. Some of the findings confirm what retailers already know by glancing at the best-seller lists. For example, Nook users who buy the first book in a popular series like “Fifty Shades of Grey” or “Divergent,” a young-adult series by Veronica Roth, tend to tear through all the books in the series, almost as if they were reading a single novel.

Barnes & Noble has determined, through analyzing Nook data, that nonfiction books tend to be read in fits and starts, while novels are generally read straight through, and that nonfiction books, particularly long ones, tend to get dropped earlier. Science-fiction, romance and crime-fiction fans often read more books more quickly than readers of literary fiction do, and finish most of the books they start. Readers of literary fiction quit books more often and tend skip around between books.

Those insights are already shaping the types of books that Barnes & Noble sells on its Nook. Mr. Hilt says that when the data showed that Nook readers routinely quit long works of nonfiction, the company began looking for ways to engage readers in nonfiction and long-form journalism. They decided to launch “Nook Snaps,” short works on topics ranging from weight loss and religion to the Occupy Wall Street movement.

Pinpointing the moment when readers get bored could also help publishers create splashier digital editions by adding a video, a Web link or other multimedia features, Mr. Hilt says. Publishers might be able to determine when interest in a fiction series is flagging if readers who bought and finished the first two books quickly suddenly slow down or quit reading later books in the series.

“The bigger trend we’re trying to unearth is where are those drop-offs in certain kinds of books, and what can we do with publishers to prevent that?” Mr. Hilt says. “If we can help authors create even better books than they create today, it’s a win for everybody.”

Some authors welcome the prospect. Novelist Scott Turow says he’s long been frustrated by the industry’s failure to study its customer base. “I once had an argument with one of my publishers when I said, ‘I’ve been publishing with you for a long time and you still don’t know who buys my books,’ and he said, ‘Well, nobody in publishing knows that,’ ” says Mr. Turow, president of the Authors Guild. “If you can find out that a book is too long and you’ve got to be more rigorous in cutting, personally I’d love to get the information.”

Others worry that a data-driven approach could hinder the kinds of creative risks that produce great literature. “The thing about a book is that it can be eccentric, it can be the length it needs to be, and that is something the reader shouldn’t have anything to do with,” says Jonathan Galassi, president and publisher of Farrar, Straus & Giroux. “We’re not going to shorten ‘War and Peace’ because someone didn’t finish it.”

Publishers are only just beginning to mull over the potential uses for e-reading data. Many are skeptical that analytics can aid in the industry’s ongoing battle to woo consumers who are increasingly distracted by games and social media. But at a time when traditional publishers are losing ground to tech giants like Amazon and Apple, better analytics seem to offer tantalizing possibilities.

Amazon, in particular, has an advantage in this field—it’s both a retailer and a publisher, which puts the company in a unique position to use the data it gathers on its customers’ reading habits. It’s no secret that Amazon and other digital book retailers track and store consumer information detailing what books are purchased and read. Kindle users sign an agreement granting the company permission to store information from the device—including the last page you’ve read, plus your bookmarks, highlights, notes and annotations—in its data servers.

Amazon can identify which passages of digital books are popular with readers, and shares some of this data publicly on its website through features such as its “most highlighted passages” list. Readers digitally “highlight” selections using a button on the Kindle; they can also opt to see the lines commonly highlighted by other readers as they read a book. Amazon aggregates these selections to see what gets underlined the most. Topping the list is the line from the “Hunger Games” trilogy. It is followed by the opening sentence of “Pride and Prejudice.”

“We think of it as the collective intelligence of all the people reading on Kindle,” says Amazon spokeswoman Kinley Pearsall.

Some privacy watchdogs argue that e-book users should be protected from having their digital reading habits recorded. “There’s a societal ideal that what you read is nobody else’s business,” says Cindy Cohn, legal director for the Electronic Frontier Foundation, a nonprofit group that advocates for consumer rights and privacy. “Right now, there’s no way for you to tell Amazon, I want to buy your books, but I don’t want you to track what I’m reading.”

Amazon declined to comment on how it analyzes and uses the Kindle data it gathers.

EFF has pressed for legislation to prevent digital book retailers from handing over information about individuals’ reading habits as evidence to law enforcement agencies without a court’s approval. Earlier this year, California instituted the “reader privacy act,” which makes it more difficult for law-enforcement groups to gain access to consumers’ digital reading records. Under the new law, agencies must get a court order before they can require digital booksellers to turn over information revealing which books their customers have browsed, purchased, read and underlined. The American Civil Liberties Union and EFF, which partnered with Google and other organizations to push for the legislation, are now seeking to enact similar laws in other states.

Bruce Schneier, a cyber-security expert and author, worries that readers may steer clear of digital books on sensitive subjects such as health, sexuality and security—including his own works—out of fear that their reading is being tracked. “There are a gazillion things that we read that we want to read in private,” Mr. Schneier says.

There are some 40 million e-readers and 65 million tablets in use in the U.S., according to analysts at Forrester Research. In the first quarter of 2012, e-books generated $282 million in sales, compared to $230 million for print, the Association of American Publishers recently found.

Meanwhile, the shift to digital books has fueled an arms race among digital start-ups seeking to cash in on the massive pool of data collected by e-reading devices and reading apps. New e-reading services, which allow readers to purchase and store books in a digital library and read them on different devices, have some of the most sophisticated reader tracking software. The digital reading platform Copia, which has 50,000 subscribers, collects detailed demographic and reading data—including the age, gender and school affiliation of people who bought particular titles, as well as how many times the books were downloaded, opened and read—and shares its findings with publishers. Copia aggregates the data, so that individual users aren’t identifiable, and shares that information with publishers that request it.

Kobo, which makes digital reading devices and operates an e-reading service that stocks 2.5 million books and has more than eight million users, has recently started looking at how readers as a whole engage with particular books and genres. The company tracks how many hours readers spend on particular titles and how far they get. Kobo recently found, for example, that most readers who started George R.R. Martin’s fantasy novel “A Dance With Dragons” finished the book, and spent an average of 20 hours reading it, a relatively fast read for a 1,040-page novel.

[image]William Duke

Some publishers are already beginning to market test books digitally, before releasing a print edition. Earlier this year, Sourcebooks, which publishes 250 titles a year, began experimenting with a new model of serial, online publishing. Sourcebooks has released early online editions for half a dozen titles, ranging from romance to young adult to nonfiction books, and has solicited questions and suggestions from readers. Eventually, readers’ feedback will be incorporated into the print version.

Scholastic, which publishes popular young-adult fiction such as Harry Potter and “The Hunger Games,” created online message boards and interactive games connected to its popular series “39 Clues.” The online game and message board, which has 1.9 million registered users, allows the publisher to track which story lines and characters are resonating with young readers. David Levithan, Scholastic’s publisher and editorial director, says the online feedback has shaped the ongoing “39 Clues” series and helped to turn it into a global franchise with more than 15 million copies in print.

“You very rarely get a glimpse into the reader’s mind,” he says. “With a printed book, there’s no such thing as an analytic. You can’t tell which pages are dog-eared.”

Few publishers have taken the experiment as far as Coliloquy, a digital publishing company that was created earlier this year by Waynn Lue, a computer scientist and former Google engineer, and Lisa Rutherford, a venture capitalist and former president of Twofish, a gaming-analytics firm.

Coliloquy’s digital books, which are available on Kindle, Nook and Android e-readers, have a “choose-your-own-adventure”-style format, allowing readers to customize characters and plot lines. The company’s engineers aggregate and pool the data gleaned from readers’ selections and send it to the authors, who can adjust story lines in their next books to reflect popular choices.

“Data and analytics, we’ve seen how it revolutionized certain industries like mobile apps and gaming,” says Mr. Lue. “With reading, we don’t yet have that engagement data, and we wanted to provide a feedback mechanism that didn’t exist before between authors and readers.”

Coliloquy developed its software through Amazon’s Kindle data developer program, which allows outside companies to create interactive content for Kindle. Their proprietary data platform draws on complex algorithms, similar to gaming software, that lets readers choose from different narrative pathways.

The company hired six editors and five technology and product developers and began recruiting authors from a range of genres, including romance, nonfiction, young adult fantasy and erotica. Since launching this past January, the company has released eight titles, and is expanding into crime fiction, legal thrillers and experimental fiction. Mr. Lue and Ms. Rutherford declined to provide sales figures for Coliloquy’s titles, citing a nondisclosure agreement with Amazon. But they say more than 90% of readers who buy Colloquy’s books, which range from $2.99 to $7.99, finish reading them, and 67% reread the books.

In “Parish Mail,” Kira Snyder’s young adult mystery series set in New Orleans, readers can decide whether the teenage protagonist solves crimes by using magic or by teaming up with a police detective’s cute teenage son. Readers of “Great Escapes,” an erotic romance series co-written by Linda Wisdom and Lynda K. Scott, can customize the hero’s appearance and the intensity of the love scenes. A recent report from Coliloquy showed that the ideal hero for “Great Escapes” readers is tall with black hair and green eyes, a rugged, burly build and a moderately but not overly hairy chest.

In Tawna Fenske’s romantic caper “Getting Dumped”—which centers on a young woman who finds work at a landfill after getting laid off from her high-profile job at the county’s public relations office—readers can choose which of three suitors they want the heroine to pursue. The most recent batch of statistics showed that 53.3% chose Collin, a Hugh Grant type; 16.8% chose Pete, the handsome but unavailable co-worker; and 29.7% of readers liked Daniel, the heroine’s emotionally distant boyfriend.

Ms. Fenske originally planned to get rid of Daniel by sending him to prison and writing him out of the series. Then she saw the statistics. She decided 29.7 % was too big a chunk of her audience to ignore.

“So much of the time, it’s an editor and agent and publisher telling you, ‘This is what readers want,’ but this is hands-on reader data,” says Ms. Fenske, 37, who lives in Bend, Ore. “I’ve always wondered, did that person buy it and stop after the first three pages? Now I can see they bought it and read it in the first week.”

 Your E-Book Is Reading You – WSJ.com.

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Daily Report: For Tablet, Microsoft Breaks Away From Partners – NYTimes.com


 

Daily Report: For Tablet, Microsoft Breaks Away From Partners

By THE NEW YORK TIMES

SEATTLE — A move by Apple to secure high-quality aluminum from Australia foriPad cases was one of many incidents that gradually convinced Microsoft that it needed to create its own tablet computer,Nick Wingfield reports in Monday’s New York Times.

The announcement of the Microsoft tablet, called Surface, was the most striking evidence yet of the friction between Microsoft and its partners on the hardware side of the PC business. It is the first time in Microsoft’s almost four-decade history that the company will sell its own computer hardware, competing directly with the PC makers that are the biggest customers for the Windows operating system.

For hardware makers, the PC market has long been a struggle because Microsoft and Intel, maker of the microprocessors that power most computers, have traditionally extracted most of the spoils from the industry, leaving slim profits for the companies that make them. Manufacturers pay hefty fees to license Windows from Microsoft, putting pressure on them to make computers as cheaply as possible using commodity parts.

That, in turn, has limited their ability to take the kinds of risks on hardware innovation that have helped define the iPad. Furthermore, with the iPad, Apple has proved that there are significant advantages to designing hardware and software together. When separate companies, each with its own priorities, handle those chores, integrating hardware and software can be more challenging.

“You’ve got this sclerotic partnership structure where the partners don’t have any oxygen to be innovative,” said Lou Mazzucchelli, an entrepreneur in residence for a venture capital fund backed by the state of Rhode Island and a former technology analyst. “I believe Microsoft was painted into a corner. If they didn’t move soon, Apple would have so much of a lead, it would be almost impossible to catch them.”

 Daily Report: For Tablet, Microsoft Breaks Away From Partners – NYTimes.com.

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Iranian-American woman says Apple refused to sell her an iPad | The Sideshow – Yahoo! News


Iranian-American woman says Apple refused to sell her an iPad

By Eric Pfeiffer, Yahoo! News | The Sideshow – Tue, Jun 19, 2012

N.J. resident Jim Otun reads a dua from the Quran on his iPad (Rich Schultz/AP)

 

19-year-old Sahar Sabet says an Apple Store in Georgia refused to sell her an iPad after a store representative overheard her speaking in Farsi.

“Very hurtful, very embarrassing. I actually walked out in tears,” Sabet told WSBTV about her experience.

When a reporter from the station returned to the same Apple Store with Sabet, the employee once again reiterated that it is Apple company policy to not sell products to anyone from Iran. The WSBTV reporter recorded video of the exchange on her phone.

Sabet is a U.S. citizen and a student at the University of Georgia but the iPad was to be a gift for a cousin living in Iran.

“When we said ‘Farsi, I’m from Iran,’ he said, ‘I just can’t sell this to you. Our countries have bad relations,’” Sabet said.

The employee showed them Apple’s corporate policy on export sales, which reads:

PROHIBITED DESTINATIONS

The U.S. holds complete embargoes against Cuba, Iran, North Korea, Sudan, and Syria

The exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a U.S. person wherever located, of any Apple goods, software, technology (including technical data), or services to any of these countries is strictly prohibited without prior authorization by the U.S. Government. This prohibition also applies to any Apple owned subsidiary or any subsidiary employee worldwide.

The Council on American-Islamic Relations (CAIR) released a statement after the incident, calling on Apple to change its corporate policy on sales to Iran.

“Apple must revise its policies to ensure that customers do not face discriminatory treatment based on their religion, ethnicity or national origin,” said CAIR National Executive Director Nihad Awad. “If the actions of these Apple employees reflected company policy, that policy must be changed and all employees retrained.”

Sabet says she later called Apple’s corporate customer relations, where an employee reportedly apologized and told her she could buy an iPad online.

 Iranian-American woman says Apple refused to sell her an iPad | The Sideshow – Yahoo! News.

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Who will be Microsoft’s Tim Cook? | asymco


Who will be Microsoft’s Tim Cook?

JUN 20 2012

Horace Dediu

As previously noted, Apple has overtaken Microsoft (and Google) in operating margin percentage. This is an astonishing statistic as Apple is still largely perceived to be a “hardware company” while Microsoft is a “software company” and Google is a “services company.”

To suggest that “hardware” could be more operationally profitable than either software or services is akin to heresy in technology analysis. This reversal is newsworthy indeed. However, even the most casual observer would note that Apple does not derive its market power from hardware alone. It is, in fact, an integrated hardware, software and services company (with a few more roles besides.)

So the emergent successful business architecture in this technologically transitional period is of integration and completeness of solutions.

This shift explains at least at a conceptual level Microsoft’s tectonic Surface shift.

But what about another point of view? What does integration mean for Microsoft’s income, cost and profit structure? Is integration self-disruptive to Microsoft?

Here’s a reminder of Microsoft’s revenues and operating income by division:

The challenge of devices for Microsoft is that the licensing of software for devices is very difficult to sell.

In 2011 Microsoft received about $18.7 billion in Windows revenues and $23 billion in Office revenues. The chart shows that this is a fairly steady growth business. According to Gartner, in 2011 there were about 336 million Windows PCs sold and that this too is a fairly stable and mature business.

If we simply divide revenues by PCs sold we get about $55 Windows revenues per PC and $68 of Office revenues per PC sold [1]. The total income for Microsoft per PC sold is therefore about $123. If we divide operating income by PCs as well we get $35 per Windows license and $43 per Office license. That’s a total of $78 of operating profit per PC.

Now let’s think about a post-PC future exemplified by the iPad. Apple sells the iPad with a nearly 33% margin but at a higher average price than Microsoft’s software bundle. Apple gives away the software (and apps are very cheap) but it still gains $195 in operating profit per iPad sold.

Fine, you say, but Microsoft make up for it in volume. Well, that’s a problem. The tablet volumes are expanding very quickly and are on track to overtake traditional PCs while traditional PCs are likely to be disrupted and decline.

So Microsoft faces a dilemma. Their business model of expensive software on cheap hardware is not sustainable. The future is nearly free software integrated into moderately priced hardware.

For Microsoft to maintain their profitability, they have to find a way of obtaining $80 of profit per device. Under the current structure, device makers will not pay $55 per Windows license per device and users will not spend $68 per Office bundle per tablet. Price competition with Android tablets which have no software licensing costs and with iPad which has very cheap software means that a $300 tablet with a $68 software bill will not be competitive or profitable.

However, if Microsoft can sell a $400 (on average) device bundled with its software, and is able to get 20% margins then Microsoft is back to its $80 profit per device sold. This, I believe, is a large part of the practical motivation behind the Surface product.

The challenge for Microsoft therefore becomes to build hundreds of millions of these devices. Every year. Sounds like they need a Tim Cook to run it.

Notes:

1.    Microsoft accounts for revenues using deferrals due to Software Assurance pre-payment models for many corporate customers so this figure is not a precise value for each license sold.

 Who will be Microsoft’s Tim Cook? | asymco.

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